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Tuesday, September 27, 2022

How to Start a Mail Order Business

If you hear the term ‘mail-order business,’ you may feel like this is a blast from the past. In some ways, you are right. But believe it or not, mail-order businesses are still alive and thriving. They just happen to be more often referred to as direct-mail marketing businesses. Regardless of the term you use, a mail-order or direct-mail marketing business is simply the method of merchandising that is used to share offers with a buyer via some sort of catalog or advertisement.

Historically, mail-order catalogs were literally sent through the mail. These mass mailings included large catalogs that went right to the target audience member’s mailbox. The customer would then spend their time looking through the catalog and would then call a toll-free phone number to make their purchase. In the United States, perhaps some of the most famous catalogs were those from J.C. Penney and from Sears, Roebuck, and Co. The Sears catalog actually started as an initial concept back in 1888 with a mailer designed to sell watches and jewelry. Later, the catalog grew in size and became a coffee table fixture in the majority of American homes. The J.C. Penney catalog has a very similar background.

Now, however, with the advent of the internet and more modern approaches to marketing, these direct mail catalogs that used to be up to hundreds of pages in size have skinned down dramatically. Today’s direct mail catalogs serve more as advertisements and are intended to excite customers thus driving them either into a retail location or online to complete the transaction.

How to Start a Direct Mail Order Business

Provided you have a great product to sell that customers will want, a great company name, and a palatable price for that product, direct mail businesses are quite easy to get started. In its simplest manner, you create a sales piece, whether it be a concise product catalog or a flyer that drives customers to your website, these pieces go out in the mail to your target audience.

Of course, in today’s world, you will also want to make sure that you have a website up and running that can be leveraged for customers to make their purchases. Some customers will still call to make purchases, but the majority of today’s shoppers are digitally savvy and will expect you to have a web presence via a digital e-commerce platform and the ability to conduct the transaction online. If you only offer a mail-in order form or a phone number that customers can use, you will find it far more difficult to turn your business into a profitable one.

Once you have all of the above set up, there are hundreds of list brokers available that you can work with to develop your initial mailing list. The initial mailing list should be based on the target audience that you identified during the product development phase. You will want to make sure you understand your target audience’s demographics as well as key problems that they are trying to solve and why your product will help solve those challenges.

With that brokered list, you will be able to send out your direct mail collateral to prospective customers. Of course, if you are also diligent in advertising your business on social media channels, including Facebook, Instagram, and Pinterest, you will also be able to capture customers in that way. Through those transactions, you will obtain additional customer information that can then be added to your mailing lists.

Starting a Mail Order Business from Home

Recently, there have been several news stories about Sara Treleaven Blakely, the owner of Spanx. Blakely has publicly shared her business growth story across media outlets, telling the tale of how she identified a strategy to help women feel slimmer and more comfortable in their clothing. She designed the product and sold it out of her home for many years, balancing her new business with her full-time job.

Though not everyone will hit it big like Blakely did, becoming a billionaire with her product, her story does show that with the right product and the right perseverance, anything is possible. And in fact, many direct mail businesses started out of home basements and garages.

Starting a Mail Order Food Business

With the rising popularity of healthy food choices, more and more consumers are looking for both healthier meals as well as environmentally friendly food packaging. Business owners who can meet those needs will have an advantage over those that cannot. Though shipping food is a bit more complicated than the shipping of dry goods and products, today’s packaging technology has made it possible to ship almost any food item from a direct-mail-type program.

In addition to healthy food choices, spices are also a great product for a mail-order food business. Regardless, however, of the type of food or spice that you might wish to market, with the proper packaging solution and price point, mail-order foods can be a timely opportunity. The process to start a mail-order or online food business is the same as with any other business, other than that packaging needs to be carefully selected and the right shipper needs to be able to manage the shipping of food items.

Popular Mail Order Business Ideas

If you have an entrepreneurial spirit and are thinking of getting into the mail-order and online direct-mail business, now is a great time to pursue some unique options that will serve today’s market. Some popular ideas include:

  • Fine art – Do not assume that all art lovers or collectors go to galleries to procure artwork.
  • Music DVDs – Though DVDs are on their way out as digital downloads become more and more common, there is still a niche out there that wants to collect old DVDs (even used ones)
  • Lingerie and intimate sleepwear – Sellers that have a unique take on comfortable lingerie and sleepwear can definitely find their target market as many consumers prefer to purchase these items privately instead of in a store.
  • Recycled denim jeans – Today’s denim enthusiasts love the wear and tear and feel of old jeans
  • Vintage car parts – Car enthusiasts aren’t always in a position to travel across the country visiting junkyards for parts
  • Personalized t-shirts and clothing items – These items are always popular, especially as the holidays approach
  • Mosquito and bug repellents – Outdoor enthusiasts are always looking for the next best way to keep mosquitos at bay and will appreciate the opportunity to order online and receive quick shipping
  • Hand soaps and lotions – Organic hand soaps and lotions, especially those with recyclable containers are popular amongst those concerned about the environment

The eight ideas above are simply a snapshot of the types of business ideas that could be suitable for the mail-order and online selling space. The key to determining the right product to use in your direct mail-order business comes down to the identification of a need that you can solve and how your approach to solving the problem is different from others in the market. You also want to ensure that your niche is large enough for you to profit in the long term. For example, Sara Treleaven Blakely had a pretty wide audience – women. And, as there will always be women who want to look and feel better in their clothing, she can be pretty ensured that her niche won’t be going away anytime soon.

Starting your Mail Order Business with Little to no Investment

For most mail-order businesses, some sort of investment will be required. But, depending on the type of product that you decide to sell, your investment doesn’t have to be all that much. If you are starting your business from home, you may even be able to take a tax break on the portion of your home used for your business.

Typical expenses when starting any business will include:

  • Inventory – costs to obtain the product you will sell, inclusive of product development costs
  • Marketing – costs to promote your product (website and e-commerce platform expenses and the cost for the direct mail piece itself)
  • Payroll – costs to pay and staff that you bring on to support you and your business
  • Insurance – this will vary but, in most cases, you will need insurance to cover anything unexpected that comes up along the way
  • Travel – costs or any travel that you do during the business development phase or when promoting the product
  • Shipping – in most cases, this expense will be passed along to the customer, but you should also be prepared to cover costs for any exception-based shipping or for other items that you need to ship to and from your place of business

When overhead costs are kept low, the time it will take to reach profitability will likely be less than for those businesses with higher overhead. This all said it is complicated if not impossible, to determine how long it will take for a start-up of any kind to become profitable. In most cases, it will take two to three years, but with an excellent product, a secure long-lasting niche, and a target audience that is ready and waiting for what you have to offer, the path to profitability can become much shorter.

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